Should Congress Impeach Obama for His Emoluments Clause Violations?

My prior post explained how ordinary business transactions between foreign governments and the Trump Organization would not automatically create violations of the Foreign Emoluments Clause regarding President-elect Trump. That post concluded that the term “emolument” refers only to payments made in connection with the performance of services for a foreign government (whether as an officer or employee), and does not refer to any conceivable payment from that government. The prior post relied on Supreme Court opinions, Office of Legal Counsel opinions, definitions in legal dictionaries, and so on. (For my full-length law review article on the relevant issues, please see here: The Foreign Emoluments Clause and the Chief Executive.)

However, some commentators, most notably Professor Richard Painter (Minnesota) and Norm Eisen (Brookings Institution), have argued for a much broader definition of emolument. The legal basis for their interpretation remains unclear because they make no mention of Supreme Court opinions, OLC opinions, Comptroller General opinions, legislative enactments, or other legal authorities, but their article in The Atlantic defines emoluments as reaching “anything of value.” (Their longer Brookings Institution report, co-authored with Professor Larry Tribe, takes a similarly broad approach without citing or examining relevant authorities. See page 11.) This post explains how their interpretation, if accepted, would support the impeachment of President Obama.

To understand why this is so, one should note that the term “emolument” appears multiple times in the Constitution. Regarding President-elect Trump, commentary has focused on the Foreign Emoluments Clause, but the Constitution also contains a Domestic Emoluments Clause. The Domestic Emoluments Clause provides, as relevant here, that the President shall receive a fixed compensation for his services, but “shall not receive . . . any other Emolument from the United States.” This clause guards against, among other things, the legislature compromising the President’s independence by offering him additional emoluments. See Alexander Hamilton, Federalist No. 73.

Under Eisen, Painter and Tribe’s definition of emolument, President Obama has violated the Domestic Emoluments Clause. The President’s financial disclosures reveal that he owns United States Treasury bonds, and that he has received interest payments from the United States. See Page 3 of 2015 Disclosures (reporting between $500,000.00 and $1,000,000.00 of Treasury bonds held by Obama directly or through an IRA). The interest income paid by the United States to President Obama is notpart of the fixed compensation attached to the Presidency. Consequently, if an emolument includes any payment, Obama’s receipt of interest income from the United States violates the Domestic Emoluments Clause. Under Eisen, Painter and Tribe’s definition of emolument, President Obama must be impeached.

But one might argue, for whatever reason, that interest income should be excepted from the definition of emolument. However, Professor Painter specifically points to payments from banks as a constitutional problem. See Mother Jones, Nov. 11, 2016 (Painter: “[P]ayments from banks controlled by foreign governments would fall under the emoluments clause.”). And if interest income from the Chinese government is prohibited under the Foreign Emoluments Clause, it’s hard to see why interest income from the United States government would not be similarly prohibited under the Domestic Emoluments Clause. (For another instance where President Obama profited from U.S. government transactions, see USA Today, State Dept. buys $70K of Obama books (Oct. 26, 2011).)

One might alternatively argue that the Domestic Emoluments Clause should receive a more lenient, President-friendly interpretation than the Foreign Emoluments Clause. But it’s again hard to see why this is so. Unlike the Foreign Emoluments Clause, the Domestic Emoluments Clause is absolute. That is, Congress can approve a U.S. officer’s acceptance of an emolument by a foreign government, but the President is flatly prohibited from receiving any emolument from the United States, other than his fixed compensation. In this respect, the Domestic Emoluments Clause is tougher, not weaker, than the Foreign Emoluments Clause. And the Domestic Emoluments Clause specifically applies to the President, whereas it is debatable whether the Foreign Emoluments Clause applies to him. See What DOJ Opinions Say About Trump and the Foreign Emoluments Clause, Yale J. Reg. Notice & Comment (Dec. 7, 2016).

Of course, under a sensible definition of “emolument,” President Obama should not be impeached. My prior post explained that emoluments include only payments received as compensation for services provided as an officer or employee, and under this approach, the interest income that Obama receives on account of his Treasury bills does not relate to his services as President. Rather, he receives interest income from the United States in his capacity as a creditor, and the Domestic Emoluments Clause should not apply to that interest income. For similar reasons, the Foreign Emoluments Clause should not automatically apply to interest payments received by Trump from foreign governments.

This is not to say that President Obama or soon-to-be President Trump could properly take any interest payment from the United States or from a foreign government. If the prevailing interest rate on the Treasury bills held by Obama paid 2% interest, but President Obama obtained an above-market rate of interest (say, 5%), that would provide some evidence that Obama had extracted a prohibited emolument. (I do not mean to suggest that Obama would do such a thing — he strikes me as a person of exceptional integrity. However, this hypothetical helps further the legal analysis here.)

Regarding President-elect Trump, the analysis would be similar. If he, through his business, receives an above-market interest payment from foreign governments, that would provide a sign that he is profiting from providing services to a foreign government, and is not simply being compensated for the loaning of funds. But where transactions involving the Trump Organization are conducted at arm’s length, no emolument arises.

Of course, this is all hypothetical, because it is exceptionally unlikely that Congress will invoke the emoluments clauses to conduct impeachment proceedings against soon-to-be President Trump (or against President Obama, for that matter). However, in the unlikely circumstance that impeachment proceedings begin against Trump, his critics will have given him a rhetorically clever defense. Trump’s lawyers can use the approach of Eisen, Painter and Tribe to show that Obama received prohibited emoluments, and that Trump should not be impeached — he simply followed President Obama’s precedents.

He can argue precedent if the sole claim is collecting interest from a state, but we all know that’s not going to be the case or we would not be debating this issue.

The primary concern that motivated the foreign emoluments clause was fear that our leaders would become dependent on and corrupted by payments from foreign governments and leaders. Your point about interest payments is well-taken; taken to a most absurd point you could argue that such payments violate the domestic emoluments clause. It has been practice that placing assets in a blind trust cures any constitutional issue; no one would argue that you need a blind trust for Treasury bonds though you might argue that any payment even to a blind trust is violation interpreting the clause strictly.

However the view that either emoluments clause can and should be limited to profits from office would create a loophole so big you could drive a gold-plated armored truck right through it.

I am curious to get your view on a few hypotheticals, all of which seem ok under your hypothesis :
1. Bahrain hosts its Government Official Conference in Washington DC. In previous years, they booked at the Hilton but decide that this year they should book at Trump Hotel with the hope that this will be looked favorably on by the US Government. They pay market rate, but decide it will look good to upgrade some of their rooms to executive suites and to have a slightly more extravagant reception than usual. They spend so much that, as is customary and they have done for other clients, Trump Sr. and Jr. both call to thank them for their patronage. Talk turns to politics as it often does, and the Bahrain government official has an opportunity to bring up certain issues of interest to the country that they otherwise would not have had the opportunity to do so. In total, they pay about $1.5 million for the conference, which nets profits that are distributed among the Trumps. They payments are market-rate and no one could prove that the profits were from office.
2. Beijing University offers President Obama a position as an adjunct lectures in Constitutional Law. They offer to pay him $2 million plus expenses (including secret service) for a total of four lectures. The stated basis for the compensation is that Obama has extensive knowledge of constitutional law. Obama agrees to a contract for one semester and renews for a second. Obama cuts some time out from planned vacations to create and give the lectures. While his presidential salary is nice, the Beijing salary is much more lucrative and Obama does not want to give it up. To ensure renewal he makes an extra effort to give small little extras to China in negotiations (good luck proving it though). Congress declines to review because while $2 million seems high, it’s hard to say what the market for such a lecture might be.

Thank you for the very thoughtful comment. My responses will make the same assumption that my post did (that there’s no Congressional consent and that the foreign Emoluments Clause actually applies to the President):

1. If the facts truly are as described — that the payments are at market rate and it is impossible to prove otherwise — then I do not see the emoluments clause violation. For example, if someone walked into the Trump Tower cafe and bought a Coke for $2, and for whatever reason Trump was walking by and said “Thanks for buying the Coke!”, I do not believe that the Constitution would be violated, even though Trump will have earned a profit from the sale.

Of course, as expenditures get more lavish and the purchases become increasingly unique, then it may become harder to assume that a transaction was performed at a market rate. But you have asked me to assume a market rate payment, and under that assumption, no Constitutional violation would occur.

2. This one is easier because I believe that if a foreign government is paying the President for services provided personally, then there is a nearly irrebuttable presumption, under the domestic Emoluments Clause, that the payments relate to services provided in his capacity as President. So I would find a Constitutional violation here. Ditto if a foreign government hired Trump to hold a real estate seminar or something like that, though see my forthcoming article explaining further nuances.

I can tell you exactly how this will go. They will apply the clause to Trump as widely as they can, but apply it as loosely as possible to Obama book sales to foreign countries.

Your making a fundamental error in thinking. Your assuming this is about apply the law, it’s not. It’s about using the law to target someone that someone does not like! There will be a sensible interpretation of the law that people will insist be applied to Obama and then a “we need a reason for impeachment” interpretation that they will twist and contort to apply to Trump……..

Under the first hypothetical above (Bahrain renting rooms at Trump’s hotel), couldn’t one argue that we should account for the “natural” market demand, not just the market rates? For example, what if the rooms were otherwise going to be left unoccupied? And, maybe to make the influence peddling clearer, if, in every year past, Bahrain paid substantially less for rooms? Does this not count as an emolument?

To use another hypothetical that could have happened at the time of the founders: George Washington has 1,000 horses potentially for sale every year, but in any given year he sells no more than 100. The French ambassador offers to purchase all 1,000 horses–900 more than Washington has ever sold in a year–but at market rate. Is that not an emolument violation just because the horses were purchased at market rate? Common sense would suggest that the founders would have looked askance at that sale.

Though maybe harder to prove, the Trump-hotel scenario has a similar logic: a foreign government is giving Trump more money than he would have otherwise received, not withstanding that the foreign government paid market rates.

And as far as the buying a Coke scenario: that seems like a stretch under any circumstances. There can be no serious argument that paying $2 for a soda, even if 100% profit to Trump, will have any real or even (rationally) imagined influence on anyone. Wouldn’t that matter? Or is it really supposed to be that binary?

Thank you for chiming in. Regarding the example where foreigners contribute to market demand, I’m quite skeptical that the ordering of customer purchases matters. If I’m a hot dog seller and determine that market forces allow me to sell 200 hot dogs at $2 apiece, and the first 180 are sold to representatives of foreign governments, but the next 20 are sold to private persons, have the foreigners in any sense “overpaid”? No. If the price were inflated, then the final 20 hot dogs wouldn’t have been sold. And to respond to your example, why should it then make any difference if the first 20 persons in line are private persons?

Now, if your point is instead that foreign purchasers are part of the overall market and in that way can affect the quantity demanded, and can potentially* increase the market price, then surely you are correct. But even then, I would return to the point outlined in my prior post. If foreigners love hot dogs and the market price increases to $2.50, and private persons continue to purchase them at $2.50, in what sense does the purchase price relate to the provision of White House services (as opposed to the payment of the purchase price for a hot dog)? The private person customers are not getting anything from the White House when they buy a hot dog for $2.50. Under what theory would a portion the $2.50 paid by a diplomat reflect a payment for White House services? Again, I understand that the diplomat might happily tell the White House that “I purchased one of your hot dogs!”, but that does not change the fact that the FMV of the hot dog, as evidenced by purchases by private persons was $2.50.

This reminds me of a fun analogy in criminal law. No matter how truly you believe that something is unlawful, simply believing it does not make it so. You may think it’s a felony to pick your nose, but picking your nose is not a crime. And no matter how hard someone believes that purchasing something for FMV is actually a disguised payment for services, those thoughts cannot make it so.

Regarding the $2 Coke example — you scoff and say that it’s a “stretch,” but Tribe et. al. are very clear that Trump is a “walking, talking violation of the Emoluments Clause” and that ANY payment from a foreign government violates the Constitution. Also, I understand the policy concern you raise, but the text of the Emoluments Clause does not limit its application to circumstances where the U.S. officeholder may be improperly influenced. Rather, the provision prohibits all emoluments and then leaves it to Congress (not us) to decide whether to allow it.

Perhaps the $2 Coke example can be ignored under the general principle that “the law ignores trifles,” but then I would just modify the example: “Suppose 50 diplomats come through the Trump Tower daily and purchase Cokes for $2 apiece.”

Thank you again for chiming in!

*Of course, a bigger quantity demanded can lead to a bigger quantity supplied, so an increase in customer demand doesn’t necessarily the equilibrium market price, but let’s ignore that complication.

You might be correct on the overall question of what constitutes a prohibited emolument. But I must note that your argument to the effect that “Trump should not be impeached — he simply followed Obama’s precedent.” is not a valid defense. The general form of this argument is that X did something as bad as what I did, and he wasn’t punished for it; therefore, I should not be punished either. You wouldn’t defend a politician who took bribes by that argument, though you could surely find historical instances in which bribes were taken, and no punishment followed. To get a sense of how persuasive this type of argument is, you could try it the next time you’re pulled over for a traffic infraction. I predict that neither the arresting officer nor ultimately the court would agree that you shouldn’t not be punished, simply because some past miscreants were not.
A better form of your argument is simply that an excessively broad understanding of “emolument” would put most presidents in jeopardy, and since that doesn’t seem like what the draftsmen would have intended, we should not employ so broad a definition. That does leave open the question of how broad or narrow the understanding of emolument should be. And surely you would agree that the nature and scope of Obama’s interest income is not closely comparable to the nature and scope of the income that Trump will receive from foreign sources, in light of the latter’s unprecedented international profit-seeking activities. In the end, the Obama precedent you want to offer really isn’t helpful.

You’re of course correct that “someone else did it” is not a great argument. Just look at what happens to taxpayers who try to use Geithner’s “TurboTax defense.” My point, perhaps not adequately expressed, was that the argument would be clever in the colloquial or rhetorical sense, and not in the legal sense. I have updated the post in response to your comment.

You are also quite correct that the nature of Trump’s relationships with foreign governments is quite different from the holding of Treasury bonds, and those relationships pose many significant conflicts-of-interest questions. However, my goal is to first determine the proper legal framework (that is, to first determine the appropriate definition of “emolument”), and then go from there. I do think that determining the proper definition is a helpful first step, because otherwise we will not apply the law correctly.

Thank you for the response. But my question was not about whether the ordering of customer purchases matter (I agree it probably shouldn’t); my question, which stab at but not fully address, is whether it matters if the foreign purchasers are filling (in fact creating) demand that wouldn’t otherwise exist?

For example, Trump’s DC hotel has a super-fancy $100,000/night room that before Trump became president was booked only one night a year, and stayed empty the rest of the year. Now, after he becomes president, the room is booked every night of the year by foreign governments. They’re paying the preciously set market rate, but they’re only paying it to curry favor with Trump and Trump is profiting above-and-beyond what he would otherwise have seen if he weren’t president.

That sounds like it falls within the spirit, and the letter, of the emoluments clause.

If that $100,000/night room had always been booked out, then I agree it’s harder (though not impossible) to argue it matters if those staying in the room are foreign governments or not.

Thank you again for your participation in this discussion. I truly appreciate it.

If the Trump Tower Grill sells only pizzas and hamburgers, and it suddenly attracts a variety of Indian diplomats, and changes its menu to include chicken tikka masala, I do not believe that the constitution is automatically violated whenever chicken tikka masala is ordered. The simple fact that an Indian diplomat orders a masala dish does not establish an “emolument” under my office-focused definition.

Of course, as with everything else in this area, the facts matter. If you are positing that the Trump Tower Grill starts offering chicken tikka masala at $1000/plate, “currying” only to Indian diplomats, when the correct fair market value is $25, I agree with you that it looks like an office-related payment may have arisen.

Regarding the example you chose, which uses the $100,000 room rental figure, my analysis would not change, assuming that we can properly ascertain the proper FMV. When dealing with such large amounts, I of course believe it is far more important to scrutinize the facts, but I do not see anything inherently unconstitutional about offering a dish of chicken tikka masala or a luxury suite to new customers. Businesses, after all, routinely offer new services. They die if they don’t.

While I tend to agree with the overall conclusion that neither President Obama, nor President-elect Trump are violating the Emoluments Clause based on their currently known situations, I am curious how these clauses relate to President Obama’s book sales from which he receives royalties.

According Forbes, after being elected President, “in 2009, Obama’s book sales peaked and he grossed nearly $5.7 million, but by 2010, gross book revenues had dropped to $1.6 million.” Moreover, the Washington Times reported that the U.S. State Department bought more than $70,000 worth of books by President Obama. In addition, Government records show the U.S. Embassy in Cairo, Egypt, spent more than $40,000 in 2009 on copies of Obama’s “Dreams from my Father.” The embassy in Greece paid more than $5,000 for “Dreams from my Father” to be used for Christmas gratuities. In South Korea, the U.S. Embassy spent $6,061 for “Dreams from my Father” for the same purpose” (see CNN: http://security.blogs.cnn.com/2011/10/26/thousands-spent-by-embassies-to-buy-obama-books/).

And, it is quite reasonable to assume that one or more King, Prince or representative from a foreign State, purchased President Obama’s books. I assume President Obama’s books appear in libraries around the World. These purchases alone would appear to violate the strictest interpretation of the foreign Emoluments Clause, which is being advocated by those in opposition to President-elect Trump.

And, of course, if book sales do violate the clause, President-elect Trump would have the same problem.

Thank you for sharing your research — I too was wondering to what extent foreign governments purchased Obama’s book. If such purchases were made directly from President Obama or an entity controlled by him, then under the Eisen/Painter/Tribe approach, Obama would have to be impeached. However, his royalty payment presumably comes from an entity unrelated to him, making the question a harder one. My forthcoming article uses simplified assumptions and concludes that, under the EPT approach, Obama should be impeached for selling books. However, under an office-based approach (the one I advocate), he should not be impeached.

First of all, thank you for responding personally to all the comments. You’ve done a great job of addressing questions. But I’m not an economist, so, though I think your assessments of the issues and sides are valid and probably completely correct by the letter of the law, I have some questions about the human elements at play, because there are a couple issues that you don’t address, or don’t address at length.
You’ve mentioned a couple times that all of this comes down to what the appropriate governing body sees fit to pursue and enforce, but acknowledging that from my view immediately throws all of the hard lines in the Constitution and other legal documents into a grey area.
First, is it reasonable that the public as well as government officials should see a difference between domestic emoluments and foreign emoluments? As a private citizen, even blatant self dealing doesn’t concern me all that much because I expect a certain amount of it, based on the history of American economic policy, but the idea of foreign powers contributing, regardless of how many back channels taken, is much more concerning because as a constituent I want American interests to be served, but not as much for foreign governments.
Second, with the enormous spectres of espionage and even threats of nuclear war, is it reasonable for citizens and officials to take greater issue with foreign entanglements cultivated prior to inauguration than those, for instance that come from sales of Obama’s books? Should it factor in the fact that Obama writes in favor of American ideals and that disseminating them abroad is generally looked upon favorably? Should this compromise our interest in pursuing charges there? I don’t know that I personally have answers of my own to these questions.
Finally, there is a whole lot of technical jargon, and discussion of the nitty gritty of market rates, quantities, and expressed gratitudes, both in the initial post and in the comments below, but I’m still pursuing the line of questioning springing from the fact that this is all subject to humans, who are inherently flawed and subjective in scope. My point is that human beings have to decide when it is appropriate to pursue charges, so they naturally are going to not go after the sale of a single hotdog, probably not two hotdogs, it’s just not worth it, though by interpreting the laws strictly and flatly it would be a double standard. At what point should people be concerned. Is it the $5000 revenue for Obama’s books? Does it kick in at the $70,000 mark? I guess my question is, can we quantify this? When do we look at something that is insulated enough to mirror precedent, yet also be so gratuitous that we can’t reasonably expect our executive administration to remain untainted by foriegn influence?
It would certainly be nice to accept the idea that these apparent, or speculative, conflicts of interest are not likely to play out against our nation, but it’s hard to shake the worry that the fabric of our democracy is destabilized, even if the only real evidence is the president-elect’s name and associated business interests.

Thank you very much for commenting and for your kind words. Regarding your questions:

“First, is it reasonable that the public as well as government officials should see a difference between domestic emoluments and foreign emoluments?

“Second, with the enormous spectres of espionage and even threats of nuclear war, is it reasonable for citizens and officials to take greater issue with foreign entanglements cultivated prior to inauguration than those, for instance that come from sales of Obama’s books?”

I think those of us alive today (like you and me!) are properly more skeptical of foreign corruption than domestic corruption, insofar as the President is concerned. Though persons of all political stripes like to complain about the government, at least when their party is not in power, I think the vast majority of us have a faith in our leaders that is not reflected in Gallup approval polls.

The Framers, however, were not looking at things through our modern lens. The Federalist Papers and other historical materials show that they were highly concerned about Presidential corruption from domestic sources, so much so that they included the domestic Emoluments Clause in the Constitution. These days, the idea of Congress buying off the President, the most powerful man in the world, seems quaint. But the possibility for corruption was much greater around the time of our nation’s founding.

So, I agree that a modern citizen can express different degrees of concern with the foreign and domestic emoluments clauses. But as a legal matter, they share similar language and purposes. And, you will have to forgive me for being so utterly focused on law, given how I’ve chosen to devote my professional life.

I would also tend to agree that the risk of corruption related to book sales or Treasury bond income is less than the risk created by, say, having a bulk of one’s personal assets located in an adverse country’s territory. These are fair policy questions to raise, but they do not go towards the fundamental legal definition of emolument. For legal interpretation, I believe that we should operate behind a veil of ignorance, and attempt to come up with a framework that applies to both a President whom we admire and whom we fear.

Some of your questions go towards basic aspects of society. As a law professor, I am in no better position than you to offer answers. My background helps me with law, but not with sorting out the sort of profound issues that I think each person has to determine independently. It appears that there will be an opportunity for all of us to reflect on what we want and expect from our country over the next 4 years.

Suppose he had simply purchased strips (bonds that pay no regular interest, but are sold at a discount and redeemed at face value at maturity) with maturity dates at the end of his term. He would not “…receive within that Period any other Emolument from the United States, or any of them” because he wouldn’t get any money from the Treasury until his presidency was over.

Since a President seems reasonably unlikely to need to access his savings during his term of office, this would actually be a pretty reasonable investment strategy given he’s already decided to invest in Treasuries. The issue of a possible second term can be easily handled with a formal agreement, executed before his first inauguration, that if he wins a second term in office then on the day of his second inauguration his strips will be automatically reinvested in newly issued strips at the then-prevailing rate with a 4 year maturity.

This also neatly avoids any conflict of interest with a presidential decision that might affect Treasury interest rates because a bond’s yield to maturity is fixed the moment you buy it. Although the market value of the strip would fluctuate with the going interest rate, this would be irrelevant since he would be constrained from selling it on the market until the end of his term — at which time it would be worth (and would be redeemed by the Treasury for) its exact face value, no more and no less. Given the excellent credit rating of the US government, any presidential decision that would affect his return would have to be an extreme one indeed, though one we might not be able to rule out such a decision with the new President.

The only disadvantage of this method for the President is that he would still be liable for income tax each year on the amount that his strips had increased in value that year, even though he doesn’t actually receive any of that cash. (The IRS reports these on form 1099-OID, for “Original Issue Discount”.) He would therefore have to plan his cash flow accordingly.

By the way, I also assume that the phrase “…or any of them” means that the Domestic Emoluments clause would apply as much to municipal bonds as to Treasuries.